What is Memcache ?
Memcache is a caching system used to speed up the performance of web applications as a whole.
Memcached is an in-memory key-value store for small chunks of arbitrary data (strings, objects) from results of database calls, API calls, or page rendering. – Source: Memcached.org
Why to use Memcache?
It typically caches data and objects in RAM for faster delivery instead of reading an External storage whenever the request is made.
Typical applications which uses Memcache ?
Wikipedia, Youtube, Twitter to name a few. Exhaustive list available in http://memcached.org/
Is it open source, when does its development started?
Yes, Memcached development was started in 2003 by Brad Fitzpatrick for LiveJournal
Typical scenario it would be powerful?
As its a distributed system when it is deployed on a cluster it can consolidate memory and can be very handy to provide quick response through its caching mechanism.
Is there a pointer where I can understand ?
Look at this interesting fable here: https://code.google.com/p/memcached/wiki/TutorialCachingStory